How many times have you been asked "Is it less if I pay cash?" or had someone else offer to reduce their charge if you can pay cash?
I know some people think I'm incredibly naive, but that ticks me off. I report every dime of income, cash or otherwise, and I think people who don't are very, very wrong.
I understand that the tax system has elements of corruption, that it is stacked toward the rich, that we in the middle class bear an unfair burden. I just can't extrapolate that to justifying dishonesty.
It is dishonesty, and it's not just the tax collector these people cheat. It's all the rest of us who are honest: we get cheated also because ultimately we'll have to make up for what the "under the table" people didn't pay.
I'm all for creative deductions: if you feel something should be deductible, go for it. The worst that can happen there is that you are wrong, which isn't criminal. It might be stupidity, but a lot of the tax code is confusing and subject to interpretation, so I don't get quite so upset when someone tells me that they deduct their golf club fees as a business expense. Maybe it really is, and maybe he can justify that. But how are you going to justify not reporting cash? You can't claim you thought it wasn't really income, can you?
Report the income, and pay the taxes. If your balance sheet is so tight that you can't afford to pay the taxes, you need to make changes somewhere else.
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